Post Office FD Scheme : Everyone saves a part of their income and plans to invest it somewhere that not only keeps their money completely safe but also offers great returns. In this regard, the Post Office Small Saving Schemes are very popular among investors. These schemes not only offer better interest rates compared to Fixed Deposits (FDs) but are also backed by the Government of India, ensuring complete safety of your investment.
One such special scheme is designed especially for senior citizens, which can help eliminate financial worries during old age. It is called the Post Office Senior Citizen Savings Scheme (SCSS). By investing in this scheme, you can earn a monthly income of ₹20,000 — all from the comfort of your home. Let’s understand how it works.
Post Office FD Scheme : High Interest Rate with Tax Benefits
If you continue to have a fixed monthly income even after retirement, you won’t face financial troubles, and your golden years can be spent comfortably. That’s why it’s best to invest in a scheme that ensures a fixed monthly payout.
The Post Office Senior Citizen Savings Scheme (SCSS) is a government-backed investment option that offers guaranteed monthly income. It is one of the most popular choices for retirees. This scheme provides higher interest rates compared to bank fixed deposits (FDs), and also comes with tax benefits under the Income Tax Act.
Key Highlights:
- Minimum investment starts from just ₹1,000
- Current interest rate: 8.2% per annum
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Tax deduction up to ₹1.5 lakh under Section 80C
Eligibility Criteria
As the name suggests, this scheme is meant exclusively for senior citizens. Any Indian citizen aged 60 years or above can open a single or joint account under this scheme.
However, there are some relaxations for specific groups:
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Individuals aged 55 to 60 years who have taken voluntary retirement (VRS) from government or civil sector jobs can also invest.
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Individuals from the defense sector (Army, Air Force, Navy, and other armed forces) can open an account between 50 and 60 years of age.
Investment Limit and Maturity Period
- The maturity period of this scheme is 5 years.
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Investors can make a lump sum investment of up to ₹30 lakh.
How to Earn ₹20,000 per Month
Here’s the simple calculation:
If an investor deposits ₹30 lakh under the Senior Citizen Savings Scheme, they will earn an annual interest of 8.2%.
That means:
₹30,00,000 × 8.2% = ₹2,46,000 per year
So, the monthly income will be approximately ₹20,500, which is credited directly to the investor’s bank account every month.
Premature Account Closure
The SCSS account can be opened at any nearby post office branch.
If the investor wishes to close the account before maturity, it is allowed — but with certain conditions:
- If the account is closed within one year, no interest will be paid.
- If closed between 1 to 2 years, 1.5% of the deposit amount will be deducted.
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If closed between 2 to 5 years, 1% of the deposit will be deducted.
Tax on Interest Income
While the scheme offers many benefits, there’s one small catch — the interest earned is taxable.
If the annual interest exceeds ₹50,000, TDS (Tax Deducted at Source) will be applicable. However, if you have submitted Form 15G or 15H, no TDS will be deducted.
In Summary
| Feature | Details |
|---|---|
| Scheme Name | Post Office Senior Citizen Savings Scheme (SCSS) |
| Interest Rate | 8.2% per annum |
| Minimum Deposit | ₹1,000 |
| Maximum Deposit | ₹30 lakh |
| Maturity Period | 5 years |
| Tax Benefits | Up to ₹1.5 lakh under Section 80C |
| TDS | Applicable if annual interest exceeds ₹50,000 |
| Monthly Income Example | ₹20,500 on ₹30 lakh investment |
Final Thoughts
The Post Office Senior Citizen Savings Scheme (SCSS) is a highly secure and rewarding investment option for retirees. Backed by the Government of India, it guarantees both capital safety and steady monthly income. With a high interest rate of 8.2%, tax savings under Section 80C, and the option of premature withdrawal, this scheme is an ideal choice for those who want a reliable income stream during their retirement years.